Li Ning Company Limited

First-half revenue increased 3.3% year over year to RMB 14.817 billion. Gross profit margin was 50%, down 0.4 percentage points. Net profit was RMB 1.737 billion, with net margin at 11.7%, down 1.9 percentage points from 13.6% last year. Operating profit margin declined to 16.5% from 16.7%. Net operating cash inflow was RMB 2.411 billion, net cash rose to RMB 19.191 billion, working capital was 7.3% of revenue, and cash conversion cycle was 31 days. The board recommended an interim dividend of RMB 0.3359 per share with a 50% payout ratio. For the full year, management reiterated a revenue target of flat and a net profit margin in the high single digits; it also said second-half marketing expenses, including Olympic sponsorship costs, will rise significantly versus the first half.

The CEO emphasized that Li Ning is staying focused on a single-brand, multi-category, multi-channel strategy, with continued investment in product upgrades, brand marketing, and channel optimization. He pointed to strength in professional running, training, and badminton, plus broader brand-building efforts through the Chinese Olympic Committee partnership and other IP/cultural collaborations. His tone was confident about the long-term sports-industry opportunity, but pragmatic about near-term consumer volatility and the need to keep operations disciplined.

The CFO highlighted a 3.3% revenue increase to RMB 14.817 billion, gross margin of 50%, and net profit of RMB 1.737 billion, noting profit performance was broadly in line with expectations. He broke down gross margin pressure as coming from deeper direct-retail discounts, a lower DTC mix, and channel structure changes, while also flagging a 0.3-point increase in advertising and marketing expense ratio to 9%. He stressed balance-sheet strength and liquidity, citing RMB 2.411 billion of operating cash inflow, RMB 19.191 billion of net cash, 31-day cash conversion, and an interim dividend of RMB 0.3359 per share. He also warned that second-half expenses will be heavier because Olympic-related spending will be recognized more fully.

There was no separate analyst Q&A in the transcript; the main interactive element was management commentary on the results and outlook. Management repeatedly addressed concerns about weaker consumer demand, slower June retail growth, and higher second-half costs, saying they are taking a more cautious and pragmatic stance. They also explained that store optimization is reducing direct retail revenue, while inventory and receivables remain at healthy levels.